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With MYRE you can create a pool of assumptions that you could apply to one or all your Business Plans. Asset and Fund Managers save time and develop more efficient Business Plans.
Better up-to-date Business Plans are the key to seamless property and portfolio management. A Business Plan analyzes one or more scenarios based on a range of assumptions. The modeling of all these assumptions can be time-consuming and prone to errors.
One of the solutions for data-heavy models is to apply percentages to some Cash Flows. Percentages are set in line with structural trends in day-to-day property and portfolio management, current business trends and the Asset Manager's experience. MYRE makes it easier to establish assumptions and maintain finely detailed analyzes with its new automatic assumptions feature for in-depth and easy-to-use forecasting programs.
What is a pool of assumptions?
Assumptions can be applied systematically to one or more properties by setting a standardized rule. You simply preconfigure sets of assumptions and apply them to one or more properties at the same time. You can then check the financial viability of a real estate project without having to carry out individual modeling for each suite or tenant.
An assumption can be used to apply recurrent trends by using specific details: same rent levels, same types of properties, same time span to reflect market conditions, etc.
Let's look at residential properties as an example. Here, the Asset Manager (AM) oversees many suites with similar characteristics. Using the average trend in lease contract maturities and vacancy rates, the AM can record an assumption in the pool for future use as and when needed. This assumption will then serve as a recurrent management rule for forecasting lease contract renewals.
Why should I build a library?
Reusable assumptions help to forecast flows for projecting incomes, expenses, occupancy rates, building costs, market trends and other key factors affecting the profitability of a real estate project.
This means that Asset and Fund Managers who use the MYRE assumptions pool can apply a steady Cash Flow calculation and more detailed data analysis to all situations. These off-the-shelf assumptions save time and automatically add uniformity to Business Plans.
How do I make automatic assumptions?
Modeling large numbers of assumptions is often complex and cumbersome. Automated assumptions save time and simplify cases that involve the modeling of large quantities of assumptions for multiple properties, as well as highly complex analyzes and those involving stress tests .
You can use MYRE's Business Plan tool to build automated assumption modeling templates.
Using a functional management rule, the automated assumptions work systematically and indiscriminately on defined items (the type of operation) to meet specific criteria (the triggers and the scope of action) and roll out actions (details of the generated assumption).
Users work directly in MYRE to set the automation criteria by choosing:
- the type of operation to be automated: e.g., renewals of lease contracts or works,
- the action trigger,
- the perimeter filter,
- an automated action based on previous data.
Automated assumptions are recorded in a pool and used for future Business Plans. The benefits of this feature are twofold:
- time savings by using existing automated assumptions,
- traceability since the same rule can be applied to all Business Plans.
